DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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----------------------------------- )      ISCR Case No. 15-02482
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Applicant for Security Clearance )
Appearances
For Government: Alison O’Connell, Esquire, Department Counsel
For Applicant: Pro Se
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings and file exhibits, I conclude that Applicant
did not mitigate the security concerns regarding his financial considerations. Eligibility
for access to classified information is denied. 
History of Case
On October 27, 2015, The Department of Defense (DOD) Consolidated
Adjudications Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons
why the DOD could not make the preliminary affirmative determination of eligibility for
granting a security clearance, and recommended referral to an administrative judge to
determine whether a security clearance should be granted, continued, denied, or
revoked. The action was taken under Executive Order 10865 (Exec. Or. 10865),
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
Department of Defense Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information
(AGs) promulgated by the President on December 29, 2005, and effective within the
Department of Defense for SORs issued after September 1, 2006.
Applicant responded to the SOR on January 14, 2016, and elected to have his
case decided on the basis of the written record. Applicant received the File of Relevant
Material (FORM) on March 2, 2016, and did not submit any post-FORM information. 
Based upon a review of the case file, pleadings, and exhibits, eligibility for access to
classified information is denied.
 
Summary of Pleadings
Under Guideline F, Applicant allegedly (a) incurred two judgments: one in
December 2013 in the amount of $11,444 and another in December 2007 for $8,503
and (b) accumulated 21 delinquent debts, exceeding $24,000. Allegedly, both the
judgments and the listed delinquent debts remain outstanding. 
In his response to the SOR, Applicant admitted most of the listed debts. He
denied the allegations covered by SOR ¶¶ 1.b, 1.e, 1.g, 1.i, 1.k, 1.q, 1.s, and 1.u with
brief explanations. He claimed he paid off a number of his accounts (five altogether,
totaling under $400) and disputed three of them (i.e., SOR ¶¶ 1.c, 1.e, and 1.g) for
reasons they had been taken off his credit report. 
Findings of Fact
Applicant is a 38-year-old pipe fitter for a defense contractor who seeks a
security clearance. The allegations covered in the SOR and admitted to by Applicant
are adopted as relevant and material findings. Additional findings follow.
Background
Applicant married in August 2001 and divorced in October 2011, subject to
finalizing the decree. (Items 5 and 8) He has no reported children from this marriage.
He earned his General Education Degree (GED) in June 2008. (Items 5 and 8) He has
not pursued any advanced education credits within the past ten years and has never
served in the military. (Items 5 and 8)  
Applicant has worked for his current employer since November 2012 as a pipe
fitter. (Items 5 and 8) He reported unemployment between September 2012 and
November 2012. Between May 2004 and August 2012 he was employed as a
locomotive engineer, and between August 2001 and May 2004, he worked as a
plumber. (Items 5 and 8)
Finances
Between May 2007 and December 2012, Applicant accrued a number of
delinquent debts. Altogether, he accumulated 23 delinquent accounts exceeding
$43,000. These accounts were referred to collection and remain unsatisfied. Two of the
accounts (i.e., creditors 1.o, and 1.p) were reduced to judgments. (Items 6-8) Listed
delinquent accounts from 2012 and 2013 that are still in collection are comprised of the
following: SOR debt ¶ 1.a ($6,395); SOR debt ¶ 1.b ($924);  SOR debt ¶ 1.c ($818);
SOR debt ¶ 1.d ($759); SOR debt ¶ 1.e ($743); SOR debt ¶ 1.f ($644); SOR debt ¶ 1.g
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($469); SOR debt ¶ 1.h ($320); SOR debt ¶ 1.i ($140); SOR debt ¶ 1.j ($136); SOR
debt ¶ 1.k ($136); SOR debt ¶ 1.l ($91); SOR debt ¶ 1.m ($48);  debt ¶ 1.r ($91); SOR
debt ¶ 1.n ($21);  SOR debt ¶ 1.q ($95); SOR debt ¶ 1.r ($91); SOR debt ¶ 1.s ($419);
SOR debt ¶ 1.t ($5,765); SOR debt ¶ 1.u ($211); SOR debt ¶ 1.v ($5,433); and SOR
debt ¶ 1.w ($2,348)
Applicant attributed most of his listed debts to poor money management and
placing too much reliance on his ex-wife to pay the bills and manage his finances.  She
failed to pay the bills according to Applicant. The circumstances surrounding his
incurred debts were not fully explained by Applicant and are lacking in details. 
One of Applicant’s debts (creditor 1.a) resulted from a car repossession. (Item 8)
Applicant co-signed with his ex-wife for the vehicle they purchased for $21,000 in 2003.
(Items 6-8) Following the repossession of the vehicle in February 2006, a deficiency
balance remained in the amount of $6,395. Neither Applicant nor his ex-wife ever paid
the deficiency balance, and the debt remains outstanding. 
Applicant purchased a motorcycle in April 2005 for $8,775. (Items 6-8) When he
fell behind with the payments, creditor 1.t repossessed the motorcycle and billed
Applicant for the $5,760 deficiency balance. (Items 6-8) Applicant has not addressed
this deficiency balance, and the debt remains outstanding.  (Items 6-8)
Another repossession resulted from Applicant’s failure to maintain payments on
home furnishings he purchased on an installment agreement he arranged in May 2006
with creditor 1.v. (Items 7-8) Following creditor 1.v’s repossession of the furniture, a
deficiency balance remained in the amount of $5,433. (Item 7) Applicant furnished no
evidence of his addressing this deficiency, and it remains outstanding. (Items 7-8) 
Applicant could not provide any specifics of the entered judgments covered by
creditors 1.o and 1.p in his January 2013 interview with an investigator of the Office of
Personnel Management (OPM). (Item 8) These judgments remain outstanding. He
provided no documentation either to corroborate his disputes of the debts he
challenged in the SOR as not his. Nor did he furnish any evidence of the debts he
claimed to have paid. He is entitled to credit for the debt covered by SOR ¶ 1.k for the
reason that the debts listed in SOR ¶¶ 1.j and 1.k appear to be duplicates.  
Applicant did not provide any evidence of financial counseling or budgeting. Nor
did he provide any endorsements, performance evaluations, or evidence of community
and civic contributions.
Policies
The AGs list guidelines to be used by administrative judges in the decision-
making process covering DOHA cases. These guidelines take into account factors that
could create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. These guidelines include "[c]onditions that could raise a
security concern and may be disqualifying” (disqualifying conditions), if any, and many
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of the "[c]onditions that could mitigate security concerns.” These guidelines must be
considered before deciding whether or not a security clearance should be granted,
continued, or denied. The guidelines do not require administrative judges to place
exclusive reliance on the enumerated disqualifying and mitigating conditions in the
guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the
context of the whole person in accordance with AG ¶ 2(c). 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a)
of the revised AGs, which are intended to assist the judges in reaching a fair and
impartial commonsense decision based upon a careful consideration of the pertinent
guidelines within the context of the whole person. The adjudicative process is designed
to examine a sufficient period of an applicant’s life to enable predictive judgments to be
made about whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: (1) the nature, extent, and
seriousness of the conduct; (2) the circumstances surrounding the conduct, to include
knowledgeable participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to which
participation is voluntary; (6) the presence or absence of rehabilitation and other
permanent behavioral chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following individual
guidelines are pertinent in this case:
Financial Considerations
The Concern: Failure or inability to live within one’s means, satisfy
debts and meet financial obligations may indicate poor self-control, lack of
judgment, or unwillingness to abide by rules and regulations, all of which
can raise questions about an individual’s reliability, trustworthiness and
ability to protect classified information.  An individual who is financially
overextended is at risk of having to engage in illegal acts to generate
funds.  Compulsive gambling is a concern as it may lead to financial
crimes including espionage.  Affluence that cannot be explained by known
sources of income is also a security concern.  It may indicate proceeds
from financially profitable criminal acts. AG ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant
or continue an applicant's security clearance may be made only upon a threshold
finding that to do so is clearly consistent with the national interest.  Because the
Directive requires administrative judges to make a commonsense appraisal of the
evidence accumulated in the record, the ultimate determination of an applicant's
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eligibility for a security clearance depends, in large part, on the relevance and
materiality of that evidence. See Kungys v. United States, 485 U.S. 759, 792-800
(1988).  
As with all adversarial proceedings, the judge may draw only those inferences
which have a reasonable and logical basis from the evidence of record.  Conversely,
the judge cannot draw factual inferences that are grounded on speculation or
conjecture.
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or
maintain a security clearance. The required materiality showing, however, does not
require the Government to affirmatively demonstrate that the applicant has actually
mishandled or abused classified information before it can deny or revoke a security
clearance. Rather, the judge must consider and weigh the cognizable risks that an
applicant may deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted
or controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the
ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is a pipe fitter for a defense contractor who accumulated a number of
delinquent debts (including two judgments) that he attributes in part to a brief period of
unemployment in 2012. His accumulation of delinquent debts between 2007 and 2012
and his failure to address these debts after returning to full-time employment in
November 2012 warrant the application of two of the disqualifying conditions (DC) of
the Guidelines: DC ¶ 19(a), “inability or unwillingness to satisfy debts,” and ¶19(c) “a
history of not meeting financial obligations.”
Applicant’s pleading admissions of the debts covered in the SOR negate the
need for any independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)). 
Each of Applicant’s listed debts are fully documented in his latest credit reports and
provide ample corroboration of his debts.
Judgment problems persist, too, over Applicant’s incurred delinquencies and
his failure to demonstrate he acted responsibly in addressing most of his listed debts
once the unemployment conditions that partially contributed to the delinquencies had
passed or eased, and his finances had improved. See ISCR Case 03-01059 at 3
(App. Bd. Sep. 24, 2004). Not only are most of his listed debt delinquencies ongoing,
but he has failed to address them. Applicant is entitled to credit for only one debt
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(creditor 1.k, which is an apparent duplication of the creditor 1.j debt.  Mitigation credit
for the remaining debts listed in the SOR is not available to Applicant based on the
evidence developed in this record.   
                                               
Holding a security clearance involves a fiduciary relationship between the
Government and the clearance holder. Quite apart from any agreement the clearance
holder may have signed with the Government, the nature of the clearance holder’s
duties and access to classified information necessarily imposes important duties of
trust and candor on the clearance holder that are considerably higher than those
typically imposed on Government employees and contractors involved in other lines of
Government business.  See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980). 
Based on the documented materials in the FORM, few extenuating
circumstances are associated with Applicant’s inability to pay off or otherwise resolve
his debts. Available in part to Applicant is MC ¶ 20(b), “the conditions that resulted in
the behavior were largely beyond the person’s control (e.g., loss of employment, a
business downturn, unexpected medical emergency, or a death, divorce, or
separation, and the individual acted responsibly.” 
Because Applicant has not taken more responsible steps in resolving his
delinquent debts covered by ¶¶ 1.a-1.j and 1.l-1.w, the second  prong of MC ¶ 20(b) is
not available to him. Nor are his explanations sufficient to warrant application of any of
the other mitigating conditions covered by Guideline F. 
Whole-person assessment does not enable Applicant to surmount the
judgment questions raised by his accumulation of delinquent debts and failure to
address them with the resources available to him from his longstanding full-time
employment. Resolution of his delinquent accounts is a critical prerequisite to his
regaining control of his  finances. 
Whole-person assessments are intended to consider not only the developed
adverse information covered in the SOR, but other information as well about the
applicant’s professional and personal history to reach and overall assessment of
security clearance eligibility. Because Applicant did not submit any favorable
character references, performance evaluations, or evidence of community and civic
contributions, favorable whole-person considerations cannot be factored into an
overall assessment of Applicant’s trustworthiness and reliability.
Taking into account all of the documented facts and circumstances surrounding
Applicant’s debt accumulations, his lack of sufficient proof of corrective actions taken
to address his old debts after returning to full-time employment, it is still too soon to
make safe predictive judgments about Applicant’s ability to repay his debts and
restore his finances to stable levels commensurate with the minimum requirements for
holding a security clearance. 
Unfavorable conclusions warrant with respect to the allegations covered by
subparagraphs 1.a through 1.j and 1.l through 1.w.  Applicant is entitled to favorable
conclusions with respect to the allegations covered by SOR ¶ 1.k.  
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Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
   
Subparagraphs 1.a through 1.j and  
      1.l through 1.w.                                     Against Applicant
Subparagraph 1.k:                                       For Applicant
Conclusions
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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